ASB has raised the cost of its variable home mortgage rate by a quarter of a per cent to 6%, a move other banks are expected to follow.
On Thursday, it become the first bank to increase the cost of borrowing after the Reserve Bank raised the Official Cash Rate to 2.75% a week ago.
Its six-month and 12-month fixed lending rates will also rise.
Phillip Macalister, publisher of financial website goodreturns.co.nz, says banks' floating rates usually move in step with the Official Cash Rate.
Mr Macalister says none of the banks wanted to go first, but he expects the others will now follow ASB's lead very quickly.
He says it is unusual for banks to wait so long after an Official Cash Rate rise before putting up their interest rates.
